FTC Issues Order to Show Cause and Modifying Final Consent Order in 1999 Matter Concerning Service Corporation International, Inc.

Commission approval of order to show cause and modifying final consent order: The FTC has approved the issuance of an order to show cause and modifying the final consent order in a 1999 matter concerning Service Corporation International (SCI). The Commission’s decision and order in that matter resolved competitive concerns arising from SCI’s proposed acquisition of Equity Corporation International (ECI), and required SCI to divest seven funeral homes and 13 cemeteries in a number of small, local markets. The order also contained a provision requiring SCI, for 10 years, to notify the FTC before acquiring an interest in a funeral home or cemetery in a market in which the divestitures were ordered.

On February 16, 2006, as required by the 1999 order, SCI notified the FTC that it intended to exercise foreclosure rights and acquire two funeral homes in the Columbus, Georgia-Phenix City, Alabama, market - one of the relevant funeral home markets defined in the order. Memorial Operations, the owner of the homes, is in default of a debt obligation secured by the two funeral homes and a third located outside the market area.

SCI owns two additional funeral homes in the Columbus-Phenix City market. If it were to acquire and retain the Memorial Operations properties, competition for funeral home services in the market could be harmed. SCI has stated that should it acquire the funeral homes, it intends to resell the properties.

The FTC has determined in its discretion that it is in the public interest to reopen this matter pursuant to Rule 3.72 of the FTC’s Rules of Practice. Further, the Commission has issued an order to show cause and order modifying the final 1999 order that adds a Paragraph VIII to the existing order. Paragraph VIII allows SCI to foreclose on the Memorial properties but requires the properties to be held separately from SCI’s other properties and divested within 60 days. It also appoints a trustee to divest the properties to an FTC-approved buyer and to oversee the properties pending divestiture. The FTC has appointed Thomas Johnson, CEO of Johnson Consulting Group, as the trustee in this matter. SCI has consented to the modification of the existing order and waived any further rights it may have under Rule 3.72.

The FTC believes modifying the existing 1999 order is the most efficient and effective way to ensure competition is maintained in the Columbus-Phenix City market and that SCI cannot obtain competitively sensitive information regarding the Memorial properties prior to their sale.

The Commission vote approving the order to show cause and modifying the final consent order, and appointing the trustee, was 5-0. A copy of the public version of the orders can be found on the FTC’s Web site as a link to this press release. (FTC Docket Number C-3869, the staff contact is Susan Huber, Bureau of Competition, 202-326-3331, see press release dated January 15, 1999.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP